Members of Hamas' military police walk through a site that was hit by Israeli air strikes in Gaza City (AFP)
Palestinian militants fired dozens of rockets into Israel and the Israeli military carried out scores of air strikes as fighting near the Gaza-Israel border intensified overnight into Thursday.
Air raid sirens sounded almost nonstop in southern Israel from sundown on Wednesday, warning residents to stay in shelters as more than 80 rockets were fired in their direction. At the same time Israeli aircraft struck 140 targets belonging to Hamas.
The flare-up came after officials on both sides had talked about potential progress in UN and Egyptian efforts to broker a truce to end months of simmering violence.
Israel's military on Thursday warned Hamas against further escalation, and Israeli media said officials were considering evacuating residents from areas near the Gaza border.
"The way things continue to play out is significant. Hamas will understand in the coming hours, as in the past months, that this is not the direction it wants to choose," a senior military official was quoted as saying on the military's Twitter account.
Israeli media reported several residents of Sderot and other border towns were wounded by rocket fire.
In Gaza, one Hamas member was killed in the air strikes, as was a Palestinian woman and her 18 month old child, Palestinian officials said. At least five other civilians were also wounded.
"I am deeply alarmed by the recent escalation of violence between Gaza and Israel, and particularly by todays multiple rockets fired towards communities in southern Israel," said UN Middle East envoy Nickolay Mladenov in an overnight statement.
The UN, he said, has engaged with Egypt in an "unprecedented effort" to avoid serious conflict, but warned "the situation can rapidly deteriorate with devastating consequences for all people."
Gaza has been controlled by Hamas for more than a decade, during which time it has fought three wars against Israel, most recently in 2014.
Israeli Prime Minister Benjamin Netanyahu called off a trip to Colombia this week to attend to the Gaza truce talks and was due to convene his decision-making security cabinet on Thursday to discuss the situation